The lines create a clear barrier. Start following these stocks and make paper trades. Degiro offer stock trading with the lowest fees of any stockbroker online. Now you have an idea of what to look for in a stock and where to find. Volume Volume is one of the most basic and beneficial concepts to understand when trading stocks. Swing Trading vs. There are several user-friendly screeners to watch day trading stocks on and to help you identify which ones to buy. Read The Balance's editorial policies. Bases can take months and even years to develop. Accumulation days are very positive events, because they signal underlying strength due to the fact that institutions are 5g small cap stocks questrade down reddit shares and pushing the stock price higher. Unfortunately, many of the day trading penny stocks advertising videos fail to point out a number of potential pitfalls:. With volume best intraday trading software for nifty metatrader 5 play store such an important element for finding the top stocks to day trade, it is no surprise that the US market is where the better stock choices are to be found:. How to pick a stock Good volume and volatility are a must to gain from trading. This developed a more pronounced uptrend green line that has continued to power the stock higher. Do you need advanced charting?
Table of Contents Expand. Trading Strategies Swing Trading. With technology, these calculations are automated and a graph gets plotted at the click on the mouse. From above you should now have a plan of when you will trade and what you will trade. Read The Balance's editorial policies. These charts, patterns and strategies may all prove useful when buying and selling traditional stocks. Next, find stocks that are relatively calm and not seeing excessive volatility. Every stock gives key buy and sell signals which can be found by simply knowing how to interpret volume on stock charts. Do you need advanced charting? The liquidity in markets means speculating on prices going up or down in the short term is absolutely viable. On the flip side, a stock with a beta of just. An inverse head and shoulders pattern is the same concept as a traditional head and shoulders, except it is upside down.
In AprilAmazon. Make sure a stock or ETF still aligns with your strategy before trading it. As the stock declined, you can see how lowers lows kept coming into play and previous support became resistance. For example, the metals and mining sectors are well-known for the high numbers of companies trading in pennies. This is a popular niche. Overall, such software can be useful if used correctly. Wedges are a sub-class of bull and bear flags. Top Stocks Finding the right stocks and sectors. The investors who bought into the breakout are subsequently quickly trapped with cheap stocks for day trading how to predict stock charts losing position. Defensive stockswhile normally associated with lower volatility, may suddenly be in demand if a market panic causes a flight to safer investments, so volume and volatility may not always spring up in the obvious places. After Retirement Basics. We also reference original research from other reputable publishers where appropriate. It can be hard for many pharmacyte biotech stock biotechnology penny stocks to alternate between trend trading and range trading. You should consider whether you can afford to take the high risk of losing your money. Institutions were heavily accumulating this dry bulk carrier as commodities continued to soar. Unfortunately, many of the day trading penny stocks advertising videos fail to point out a number of potential pitfalls:. When an investment or market is observed over time, trends can be identified. When you do this, you'll see the resistance and support level lines, and be able to spot when an investment "breaks through" one of. This is considered a large channel. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Neither Answers: shares up; down technical analysis the day prior neither because the stock traded less shares than the day prior Support and Resistance Support and Resistance is a basic form of technical analysis that olymp trade vip status what is rolling a covered call be used as a way to predict stock price movement and help traders mark potential buy and sell points. Back inFossil FOSL was a forex canadian brokers open fxcm demo account among its retail peers, not only for its great growth but also the appreciation of its stock price.
With that in mind:. The chart has two main parts. It reversed from 20 and the stock moved up. Volume is concerned simply with the total number of shares traded in a security or market during a specific period. Swing Trading Definition Swing trading is an attempt to capture gains in an asset over a few days to several weeks. If just twenty transactions were made that day, the volume for that day would be. Volume Quiz Every investor should have a strong understanding of volume and its role in the stock market. Accumulation days are very positive events, because they signal underlying strength due to the fact how does leverage work on etoro day trading en una semana pdf descargar gratis institutions are accumulating shares and pushing the stock price higher. You may have picked the sweetest stock in the world, but profiting from it will rely on strategies.
This is the bottom trend line for this particular stock at this time. Since prices change daily, the average will change thus the term move, it moves across a timeline. When this coincides with a sudden increase in trading volume the shares may be about to enter a long, sustained recovery in price. When you do this, you'll see the resistance and support level lines, and be able to spot when an investment "breaks through" one of them. If this appears to be coincident with a declining daily trading volume, investors are going to begin selling and prices will begin to tumble. Offering a huge range of markets, and 5 account types, they cater to all level of trader. Distribution day E. Usually, the right-hand side of the chart shows low trading volume which can last for a significant length of time. Must Read. If you would have sold the stock short bet that the stock was going to fall in price , this would be a signal to cover and exit for a small loss. When buying into what appears to be a great stock breaking out of a base to claim higher highs there is nothing more frustrating then seeing your investment turn from promising to junk in a matter of days. Day traders have limited time to capture profits and must, therefore, spend as little time as possible in trades that are losing money or moving in the wrong direction. Like all technical analysis though, practice and experience are required draw them cleanly. Furthermore, never fight the trend. This means if both volumes and prices are increasing, it may be the last leg of the rally. The trading platform you use for your online trading will be a key decision. Click to Zoom 2. Picking Swing Stocks.
In the stock market, accumulation is used to tradingview pro cost ninjatrader 8 atm scalping strategy the accumulation of shares by traders. The Balance uses cookies to provide you with a great user experience. If a resistance or support level is associated with increasing volume, the trend becomes more valid. Volume Quiz Every investor should have a strong understanding of volume and its role in the cheap stocks for day trading how to predict stock charts market. A company that has been running for years has seen and survived more booms and busts than any hotshot trader. Earnings season can be difficult to navigate for investors intraday patterns thinkorswim banc de binary options robot do not understand the game. Distribution days are the opposite of accumulation days, and are thus considered bearish. See the best stocks to day trade, based on volume and volatility — the key metrics for day trading any market. The longer your observed time horizon, the more significant the weight carried. Volatility in penny stocks is often misleading as a small price change is large in percentage terms, but the fact is that most penny stocks end the day exactly where they started with no movement at all. Learn to spot them and you will be one step closer to performing technical analysis like the pros. Heavy distribution or accumulation identifies new trends — The two heavy distribution weeks in May and June were key turning points for the stock. Volume is concerned metatrader 4 platform competitors ninjatrader bigpointvalue with the total number of shares traded in a security or market during a specific period. Personal Finance. But, we reiterate what we mentioned in our report, "The Kick of Quick Bucks," in the October issue, though day trading looks easy, nobody can take the right call every time and there will be days when one loses money, at times a lot of it. RSI is plotted on a scale of
Candlestick charts — This chart presents the same data as a bar chart, but in a slightly different format. SINA sets up a nice handle for its base. Trading is a game of probability. When buying into what appears to be a great stock breaking out of a base to claim higher highs there is nothing more frustrating then seeing your investment turn from promising to junk in a matter of days. Once the stock broke down below this range though heavy selling quickly followed. But, if 20 investors all place buy orders of different quantities, the stock is most likely going to move up in price because there are not enough sellers. The longer your observed time horizon, the more significant the weight carried. Day trading in stocks is an exciting market to get involved in for investors. By following these four rules, we can ensure that the stock trend is valid: 1. Settings Logout. Savvy stock day traders will also have a clear strategy. Yahoo Finance. Taking a closer look at any stock chart and performing basic technical analysis allows you to identify chart patterns. Can you trade the right markets, such as ETFs or Forex? Stock Chart Types What types of charts are available?
As low commission day trading free trading app australia chart of Apple AAPL shows, studying prices over long periods of time often allows for the appearance of all three types of trends on the same chart. Many technicians believe closing price is the only point that matters. Distribution days are the opposite of accumulation days, and are thus considered bearish. Identifying the right stocks for Intraday trading involves isolating the current market trend from surrounding noise and then capitalizing on that trend. To understand what an accumulation day is, it poser traders robinhood most traded etfs by volume important to look at the basic meaning of the actual word. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. All of this could help you find the right day trading formula for your stock market. By using Investopedia, you accept. This is viewed as generally a horizontal straight line across the graph. Facebook, Apple, and Microsoft are suitable stocks for swing trading in certain market conditions. SINA sets up a nice handle for its base. In AprilAmazon. The MACD comprises two lines, fast and slow. Over 3, stocks and shares available for online trading. Note, however, there are many other common topping formations; this is just one example. A big price gap on very high volume, which means strong institutional buying of the stock, could mean more higher prices to come. Candlestick charts — This chart presents the same data as a bar chart, but in a slightly different format. When interactive brokers register best growth stock mutual funds 10 year track record are falling, support represents the moment when tickmill leverage how to write a buy write covered call with fidelity overwhelms selling and prices reverse. For more guidance on how a practice simulator could help you, see our demo accounts page. Next, they buy up enough cheap stocks for day trading how to predict stock charts to push the stock higher just high enough to trigger all the pending buy orders.
Click here to Enlarge. Offering a huge range of markets, and 5 account types, they cater to all level of trader. Mining companies, and the associated services, are another sector that can see sizeable price swings, larger than the wider FTSE market. Here are other high volume stocks and ETFs to consider for day trading. These types of fake outs bear traps are designed to shake out weak investors by triggering their stop losses prematurely. This would be a great entry point for a short position a bet that the stock is going to go down in price. But what exactly are they? The market always moves in waves, and it is the trader's job to ride those waves. Channel trading For very advanced traders, trading within a channel can sometimes lead to greater profits than simply trading with the trend. They offer competitive spreads on a global range of assets. Applying this to stocks, if one investor places an order to buy shares of stock at the current Ask price, the stock may not move up. Yahoo Finance. Partner Links.
Contrarily, if you like to base your investment decisions on sales growth, total debt, and metrics like EPS earnings per sharethen you are likely interested in fundamental analysis. To see how Fossil has fared since its monster breakout, view the weekly chart. What makes this stock especially good to start with is that the bottom trend line is already drawn for you. Related Terms Reversal Definition A reversal occurs when a security's price trend changes direction, and is used by technical traders to confirm patterns. Swing Trading Introduction. For example: Trader 1 Buys shares of stock Trader 2 Buy shares of stock Trader 3 Sells shares of stock Total volume is then 1, shares for this sequence. But what precisely does it do and how exactly can it help? Not all stocks are suitable candidates for swing trading. Your Money. Swing traders utilize various tactics to find and take advantage of these opportunities. Trading Strategies Introduction to Swing Trading. All of the strategies and tips below can be utilised regardless of where you choose to day trade stocks. Yahoo Finance. Timing is everything in the day trading game. If there is a sudden spike, the strength of that movement is dependant when do the 4 hour candlesticks close on forex market free trading app usa the volume during that time period.
Furthermore, you can find everything from cheap foreign stocks to expensive picks. Personal Finance. January This powerful line is not often seen coming in contact with market prices due to its long term calculation. Swing Trading Definition Swing trading is an attempt to capture gains in an asset over a few days to several weeks. For studying the markets by reading stock charts, here are the four main chart types used:. For example: Trader 1 Buys shares of stock Trader 2 Buy shares of stock Trader 3 Sells shares of stock Total volume is then 1, shares for this sequence. With volume being such an important element for finding the top stocks to day trade, it is no surprise that the US market is where the better stock choices are to be found:. If this appears to be coincident with a declining daily trading volume, investors are going to begin selling and prices will begin to tumble. An upside trend is generally a continuous increase in pricing for a market or investment. These are the stocks to trade in an uptrend, as they lead the market higher and thus provide more profit potential. There is no strategy that is fool-proof. Tweet Youtube. While not all act as true support or resistance, the ones that do tend to be critical as they can make or break a trend. But how do you spot a trend? Distribution Days Distribution days are the opposite of accumulation days, and are thus considered bearish. The stock of Apple Inc.
Volume is the total shares traded in a single day, so the heavier the volume, the more institutional investors were involved, which is a sign of strength bullish. When an existing trendline meets resistance, be prepared for a dynamic shift. Candlestick charts — This chart presents the same data as a bar first pot company to trade on stock exchange s&p 500 midcap blackrock, but in a slightly different format. But it is also worth identifying how much you can risk per trade, plus assign maximum daily losses or loss from top limits. Time Period — The X axis always displays the time period. The most common form of a bull trap occurs when a stock breaks higher, most often to several week or several month highs, then almost immediately reverses back into its base and sells off over the next week or longer. This allows you to borrow money to capitalise on opportunities trade on margin. As mentioned previously, trends don't continue indefinitely, so there will stock buy sell to maximize profit volume weighted moving average tradestation losing trades. Distribution Days Distribution days are the opposite of accumulation days, and are thus considered bearish. As the chart of Goldman Sachs GS shows, the blue trend line is valid as it contains four points of contact, while the green trend line is not as it has only two points of contact. Volume Volume is one of the most basic and beneficial concepts to understand when trading stocks. A mini inverse head and shoulders breakout which lead the stock on its parabolic move higher. This powerful line is not often seen coming in contact with market prices due to its long term calculation. You can view charts on weekly and even monthly views. Like all technical analysis, patterns repeat themselves, and these are no different. After an exhaustion gap in late NovemberSINA peaks over the next two months then falls into a fresh base in This is because there is more selling taking place than buying, create your own technical indicators crypto rebalancing backtest pushed the stock down in price. Distribution days are the opposite of accumulation days, and are thus considered bearish. Then, on Tuesday, the stock traded a total ofshares and finished the day .
Channels come in three forms: horizontal, ascending, and descending. This is viewed as generally a horizontal straight line across the graph. Accumulation day B. Well, then you are very focused on technical analysis, which this guide introduces. If you are looking to make a big win by betting your money on your gut feelings, try the casino. These charts, patterns and strategies may all prove useful when buying and selling traditional stocks. Now we know volume and volatility are crucial, how does that help us find the best stocks to day trade today? Overall, penny stocks are possibly not suitable for active day traders. The investors who bought into the breakout are subsequently quickly trapped with a losing position.
You should see a breakout movement taking place alongside the can i buy a fraction of amazon stock on etrade best home setup for investing and stocks stock shift. But you use information from the previous candles to create your Heikin-Ashi chart. This allows you to practice tackling stock liquidity and develop stock analysis skills. These are the price moving averages which I will explain more in point 4. By using The Balance, you accept. Moving Averages — Moving averages are a form of technical analysis that help identify support and resistance on a stock chart. The upper trendline is also a bit ragged, so this stock will be a good one to learn the feel for when the stock is going to rise and fall. Channel breakouts A move through the channel line indicates the underlying trend is strengthening. Day trading is risky and requires knowledge, skill, and discipline. Overall, penny stocks are possibly not suitable for active day traders.
In the stock market, accumulation is used to describe the accumulation of shares by traders. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Many traders opt to trade during uptrends with specific trending strategies. For example, if the rupee is falling against the US dollar, it's common knowledge that technology companies will gain. However, I have a terrific historical chart example to show using Tiffanies TIF , which includes not only both head and shoulders setups, but also a wedge! If you see this price action on a chart, it is because the 50 DMA acted as support for the stock. A big price gap on very high volume, which means strong institutional buying of the stock, could mean more higher prices to come. As the chart of Goldman Sachs GS shows, the blue trend line is valid as it contains four points of contact, while the green trend line is not as it has only two points of contact. Ayondo offer trading across a huge range of markets and assets. To start swing trading, make it easier for yourself by choosing stocks that consistently show established chart patterns. Stock Trading Brokers in France. What a beauty! These include white papers, government data, original reporting, and interviews with industry experts. Investopedia is part of the Dotdash publishing family. Swing Trading Introduction. The initial break is the ideal short entry point. With that in mind:. If this interests you, the best way to learn quickly is by picking the right stocks to buy in the first place. Point and figure charts — A point and figure chart is concerned only with price, not time or volume.
News causes BIIB to gap to the downside on heavy volume. After identifying your resistance and support levels, look for and watch the volume of trade for the investments you have chosen. Against the Trend : This pattern plays out well with penny stocks specifically, demonstrating the positive implications of an investment holding up under pressure. You should understand that it can often be misleading. One can also look the day moving average or the day moving average. The terms may sound daunting, but software available nowadays makes what are self directed brokerage accounts kirkland lake gold stock share price analysis easy. Normally, the share price will oscillate between the trendline and the parallel line, enabling swing traders to create potentially profitable trades. Volume is one of the most basic and beneficial concepts to tickdata intraday index data intraday changes when trading stocks. As traders, we all see them from time to time. Click to Zoom.
You will normally find the triangle appears during an upward trend and is regarded as a continuation pattern. A critical turning point for the stock. As the chart of Goldman Sachs GS shows, the blue trend line is valid as it contains four points of contact, while the green trend line is not as it has only two points of contact. GOOG shares break back lower and continue their downward trend to make lower lows. Rather than using everyone you find, get excellent at a few. Day traders require price movement in order to make money. Money Today. Volatility in penny stocks is often misleading as a small price change is large in percentage terms, but the fact is that most penny stocks end the day exactly where they started with no movement at all. This developed a more pronounced uptrend green line that has continued to power the stock higher. Distribution day E. Teach yourself stock chart patterns with my page interactive course, The Interactive Guide to Technical Analysis! Less frequently it can be observed as a reversal during an upward trend. When buying into what appears to be a great stock breaking out of a base to claim higher highs there is nothing more frustrating then seeing your investment turn from promising to junk in a matter of days. Gapping Stocks : When shares open higher or lower than where they traded the day before, this is known as gapping.
When reading a stock chart, moving averages can act as support or resistance. Continuation Pattern Definition A continuation pattern suggests that the price trend leading into a continuation pattern will continue, in the same direction, after the pattern completes. Gaps A price gap is created when a stock closes at price X for the day, which is at PM EST, then in after-hours or pre-hours trading the following morning is bought or sold down in price. Key Takeaways Swing traders typically try to buy a stock, hold it for two or three days, then sell it at a profit. Spreads vary, but get tighter based on the account type of the trader, with Platinum being the tightest. Click to Zoom 2. GOOG forms a bear flag, or what we now know as an ascending channel. Stocks lacking in these things will prove very difficult to trade successfully. Watch the slope — The slope of a trend indicates how much the price should move each day. On top of that, they are easy to buy and sell. You should see a breakout movement taking place alongside the large stock shift. Now we know volume and volatility are crucial, how does that help us find the best stocks to day trade today? You can draw an approximate line across these low points. You could also start day trading Australian stocks, Chinese stocks, Japanese stocks, Canadian stocks, Indian stocks, plus a range of European stocks. Access 40 major stocks from around the world via Binary options trades. Can you trade the right markets, such as ETFs or Forex? A company that has been running for years has seen and survived more booms and busts than any hotshot trader. Gapping Stocks : When shares open higher or lower than where they traded the day before, this is known as gapping.
So, there are a number of day trading stock indexes and classes you can explore. In the graph, Moving Averages, you can see the Sensex movement compared to the day moving average of the Sensex. With the buying or selling during this time when the market is technically closed, the stock then opens up at AM EST at the new price, and the stock chart shows a literal gap. Click here to Enlarge. Learn to spot them and you will be one step closer to performing technical analysis like the pros. Related Articles. The market always moves in waves, and it is the trader's job to ride those tradingview upgrade bug outside bar forex trading strategy. Practice makes perfect. Here are other high volume stocks and ETFs to consider for day trading. Stock ABC on Monday traded a total ofshares and finished the day up. There are many false positives to keep an eye out. However, if you have read above, that volume and volatility are key to successful day trades, you what are cyclical stocks put options td ameritrade understand that penny stocks are not the best choice for day traders. Skilling are an exciting new brand, regulated in Best automated trading algorithms do stock dividends fluctutate, with a bespoke browser based platform, allowing seamless low cost trading across devices. Compare Accounts. GOOG shares break back lower and continue their downward trend to make lower lows. Next Story Best performing stocks of past 6 months. To help you decide whether day trading on penny stocks is for you, consider the benefits and drawbacks listed. However, this also means intraday trading can provide a more exciting environment to work in.
Many traders opt to trade during uptrends with specific trending strategies. Most often, they are observed as a continuation pattern; however, they can also be a reversal pattern. Access global exchanges anytime, anywhere, and on any device. For example, in the given chart, Chouhan says he sees support of 4, for weekly doji stocks code for metatrader 5 Nifty and if the index falls below this, it may fall further to 4, There is more opportunity in the stock that moves. This is a popular niche. Reviewed by. To help you decide whether forex news channel tv stock wash rules day trading trading on penny stocks is for you, consider the benefits and drawbacks listed. Every day thousands of people turn on their computers in the hope of day trading penny stocks online for a living. Article Sources. Trade Only with the Current Intraday Trend. So, the blue line in the chart, MACD, is the fast line and the brown line is the slow line. Isolating the trend can be the difficult. When the day moving average fell below the price bars in April, the markets started going up. Margin requirements vary. A sideways trend is an indication that that supply and demand are relatively equal, revealing no changes in pricing trends. You should consider whether you can afford to take the high risk of losing your money. Total volume is then 1, shares for this sequence.
Doing so will help set profit targets and prevent frustration when eventual reversals occur. What a beauty! Class A Common Stock. Generally, higher volumes with higher price rise indicate an uptrend, but it should not be considered a thumb rule. What types of charts are available? Learning to identify volume trends and count accumulation or distribution day strings on a stock chart does take practice. Bank of America BAC shows a trend with an extremely steep slope blue line which will be unsustainable and eventually correct, while the one that is too flat green line calls into question both the velocity of the trend and its ability to maintain course. For studying the markets by reading stock charts, here are the four main chart types used:. Your Money. All investors understand the wisdom behind trading with the stock market trend. I went all the way back to to find great examples of setups that work time and time again. This was the proper follow up buy-point for FOSL and was the start of what has turned out to be a fantastic move for the stock. Stocks are essentially capital raised by a company through the issuing and subscription of shares. So, you have to arrive at your own methods to decide which parameters suit you the best. Volatility in penny stocks is often misleading as a small price change is large in percentage terms, but the fact is that most penny stocks end the day exactly where they started with no movement at all. How you use these factors will impact your potential profit, and will depend on your strategies for day trading stocks. Interpreting volume is a form of fundamental or technical analysis? Specific events may make a stock or ETF popular for a while, but when the event is over, the volume and volatility dry up. There are several user-friendly screeners to watch day trading stocks on and to help you identify which ones to buy.
Still, the stock is trending regularly enough that you can count on it to continue its pattern for a while and learn to time your buy and sell points regularly. Correctly identifying these trend changers will allow you to establish initial penny stocks with 200 how did stocks do today targets and to develop your own sell discipline. Often, the shares which can i buy bitcoins with debit card in europe trezor support a bottoming out pattern will be some of the best long-term holds. Was this a sign of more damage to come? If a stock usually trades 2. As long as the price remains range-bound, traders can buy at the lower end of the channel and sell at the higher end. The more buying investors do, the more accumulating that is going on, and thus more a stock price will rise. Timing is everything in the day trading game. Must Read. But, when applied correctly it is can give the investor a huge advantage in obtaining profits. If it has a high volatility the value could be spread over a large range of values. If the close is higher than the open, the real body is white. The greater the volume, the more significant and overall meaningful the day .
Here we see the support ENER has received while forming its latest base. However, with increased profit potential also comes a greater risk of losses. Yahoo Finance. This is an important distinction as resistance became support, exactly what bulls look for in a pull back. You just have to select the MACD and plot it on a chart. In short, a daily moving average is a line added to any stock chart that represents the average price of a stock over the last xx days. Here are two examples:. When reading a stock chart, moving averages can act as support or resistance. Trendlines are created by connecting highs or lows to represent support and resistance. Wedges are a sub-class of bull and bear flags. On top of that, they are easy to buy and sell. For example, in the chart, Easy Reading, you can see open, high, low and closing prices of the Bombay Stock Exchange Sensex on July 7, Resistance — If a stock has been trading below its 50 DMA for some time, then starts to trend back upwards, the 50 DMA is ofteny a point of resistance. SpreadEx offer spread betting on Financials with a range of tight spread markets.
Big volumes and large moves sometimes throw up big tops and bottoms, says Barrett. This is the bottom trend line for this particular stock at this time. Investopedia is part of the Dotdash publishing family. The stock of Apple Inc. Successfully identifying channels is an excellent way to stay ahead of the market. Degiro offer stock trading with the lowest fees of any stockbroker online. Read The Balance's editorial policies. Simple to understand, but questions remain over how to determine when a series of price movements represents a true trend versus a one-off anomaly. Commodities were red hot throughout and and analysts believed every investor should have exposure to this trend. The former is about looking into the operations of the company itself management, revenues, debts, contracts, lawsuits, etc. How to pick a stock Good volume and volatility are a must to gain from trading. After posting earnings price volatility drops alongside volume as the stock trends sideways. Conversely, when stocks are moving higher, resistance is the point where selling overwhelms buying and the price increases stop. By understanding price patterns, traders have an edge at predicting where the stock is going next.